SOURCE: Coast Bancorp

Coast Bancorp

March 21, 2011 19:31 ET

Coast National Bank Enters Into Consent Order With Regulators

SAN LUIS OBISPO, CA--(Marketwire - March 21, 2011) - Coast Bancorp (OTCBB: CTBP) announced that its wholly owned subsidiary, Coast National Bank, entered into a Consent Order with the Office of the Comptroller of the Currency (OCC) with certain requirements, including improving asset quality and specific plans for the maintenance of adequate capital. 

Jack Wauchope, Chief Executive Officer of the Bank, commented: "Everyone is familiar with the fact that the local and national economy has experienced a very difficult time. No bank has been immune from the challenges created by the economic downturn. Coast National Bank, like most businesses, is facing challenges. As we deal with those challenges, we are working closely to make sure that we handle these challenges in the correct way and in a timely manner."

In February 2011 our Board met with our regulators and the Bank entered into a Consent Order with the Office of the Comptroller of the Currency. This is a formal regulatory agreement that we take very seriously and we are committed to bringing the Bank into compliance as soon as possible. We have been giving our highest attention to improving the financial performance and safety and soundness of the Bank.

Importantly, despite the economic problems encountered over the last several years, the Bank had a Tier 1 capital ratio of 6.83% and total risk based capital ratio of 11.04% at the end of February. These ratios are after all regulatory write downs and with a reserve of 4.01% of total loans and a ratio of reserve to non-performing loans of 55.92%.

Under the agreement with the regulators, the Bank has agreed, among other matters, to: (1) Achieve and maintain a Tier 1 capital ratio of 9% of adjusted total assets and a total risk based capital ratio of 12%; (2) Maintain an adequate Allowance for Loan and Lease Losses; (3) Ensure implementation and adherence to a written commercial real estate concentration program; (4) Revise the comprehensive liquidity risk management program. (5) Prepare and implement three year strategic and capital plans; (6) Ensure effective management; (7) Adopt and implement policies to improve the Bank's loan policy management and reduce the level of credit risk in its loan portfolio; and (8) Cure credit, collateral and appraisal exceptions.

Mr. Wauchope further noted: "While these types of agreements have become somewhat commonplace in the last two years, every member of our Board and management team is focused and committed to working with our regulators to continue to resolve the issues facing the Bank and meeting all the terms and conditions of the agreement. At the same time we are committed to continuing to provide to our customers the superior care and service levels to which they are accustomed.

"We look forward to overcoming our current challenges and emerging an even stronger bank." 

About Coast Bancorp
Coast National Bank opened for business on June 16, 1997. The Bank is an independent community bank with four branches and a loan production office. With a focus on delivering unsurpassed customer service, the Bank provides small business, commercial, home and other loans, as well as an array of business and personal banking deposit products and other services. The Bank remains the number one Small Business Lender for the Small Business Administration - Fresno District Office which serves fifteen counties in Central California. The Bank is a wholly-owned subsidiary of Coast Bancorp, a $141 million bank holding company, headquartered in San Luis Obispo, California. Coast Bancorp stock trades under the ticker symbol "CTBP.OB." Additional information about Coast National Bank is available on our website, www.coastnationalbank.com.

Forward-Looking Statements
This news release may contain forward-looking statements with respect to the financial condition, results of operation and business of Coast Bancorp and its subsidiaries. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) competitive pressure among financial services companies increases significantly; (2) changes in the interest rate environment on interest margins; (3) continuing of poor economic conditions, internationally, nationally and in the State of California; (4) legislation or regulatory requirements or changes adversely affect the business in which the combined organization will be engaged.

Contact Information

  • For additional information:
    Contact:
    Gwen Pelfrey
    President
    Phone: 805.547.6109
    Email: Email Contact